Press review of late May

In this press review, we have collected hot topics that affect the interests of landlords at the regulatory level. First, a survey conducted by CORPIQ on landlords undergoing lease transfers, then the tabling of Bill 37 by the Minister of Municipal Affairs and Housing, Andrée Laforest, as well as a generalized trend towards a cooling of the real estate market.

Explosion in the number of lease assignments

A survey conducted by CORPIQ among its members revealed that nearly a quarter of the landlords were undergoing an assignment of lease, whereas the usual figures are around 10%. A situation considered serious by the executive director of the CORPIQ, as we read in this article. By undergoing an assignment of lease, even if the landlord has offered to release the tenant from his responsibilities, the landlord is forced into the assignment of lease preventing him from carrying out renovation work and updating the rent. CORPIQ would like to modify article 1871 so that the landlord can release a tenant by terminating his lease if the latter decides to leave the dwelling during the lease. However, it appears that most of the time, many lease assignments are militant activities between tenants in solidarity with the aim of keeping rents below market prices. The RCLALQ spokesperson is quoted as saying explicitly that this is a mechanism to exert control over rents: "In the current context, tenants are encouraged to do a lease transfer because it is when they move from one tenant to another that the rent increases are the most significant. This is one of the last mechanisms they have to have some control over the cost of rent," he said. In the same vein, on the airwaves of 107.7 FM (Estrie), the executive director of CORPIQ spoke during an audio interview where he discussed the difference between a sublease and an assignment of lease, in addition to describing the constraining situation experienced by landlords faced with an assignment of lease.

 

Bill 37

The Minister of Municipal Affairs and Housing, Ms. Laforest, has tabled a bill to fight against "abusive rent increases" and to give the right of pre-emption to all municipalities in Quebec. First of all, as we can read in this article in La Presse, it is a question of giving municipalities a tool to counter the housing shortage by being able to acquire land and have community housing built on it. Secondly, the modification of clause F from 5 to 3 years is justified based on the idea that it follows the same cycle as the land roll and thus allows promoters and builders to better evaluate the cost of rent, without risking to slow down the construction of housing. CORPIQ was interviewed in a Radio-Canada report in which its executive director stated that this change would be harmful to both the housing industry and tenants. It also states that this bill will ensure that housing complexes owned by NPOs that have received public funding cannot be sold to private interests without ministerial authorization.

In a report by TVA Nouvelles, the tenants' groups affirm that the reduction from 5 to 3 years is not sufficient since they demand the abolition of clause F of the lease. In the same report, we can see the mayor of Sherbrooke rejoicing in obtaining the right of pre-emption since this gives municipalities the means to manage the real estate stock according to their aspirations.

 

Real Estate Cools Down

Some will say "finally!", others will be disappointed that they did not sell their property at the height of the real estate overheating, but it is clear that housing sales have been on the decline since April. According to an article in La Presse, the number of transactions in the country fell by 25.7 per cent in April 2022 compared to April of last year. In terms of the Montreal market alone, the decrease was 17%. In fact, April saw the lowest number of sales since April 2017," says Charles Brant, director of the APCIQ's Market Analysis Department, in this article from Les Affaires.